In recent articles, we have noted several opportunities in terms of buying the CHF and we see the AUD going down on the CHF logic of the view below...

Interest Rate Outlook

 The Swiss National Bank (SNB) has an interest rate of just 1.5% while on the other side of the pair we have the Royal Bank of Australia (RBA) with an interest rate of 4.35% and the market thinks the RBA will raise rates while the SNB might cut – The SNB might cut but that's priced in - the RBA raising rates we dont think will happen and we discuss this in more detail in the article we did earlier today: Click here to view

Risk on Risk off it won't get Better for the AUD.

In terms of the outlook for the pair, the AUD is a high BETA currency that is sensitive to risk sentiment and at present, we have big risk on and it won't get better for the Aussie in our view – Why?

China Slow Up: A slowing China is bearish for the AUD because China is Australia's biggest and most important trading partner.

The market is positioned for a growing global economy but we dont see this occcuring – the US is slowing China is slowing and so too is the eurozone – there will be no big global recovery going forward which is bearish for the Aussie.

Stock Markets: We have a bullish extreme in terms of stocks and rising prices are bullish on the Aussie but we expect them to turn lower which is bearish for the AUD.

Finally, we have geopolitical tensions in Ukraine, the Middle East, and Taiwan, and any escalation of these tensions in bearish the Aussie and bullish the safe haven CHF.

Sentiment – COT Net Traders Data

You can check our previous articles on the AUD V USD where you can see speculators are heavily long the AUD but heavily short the CHF while "smart money hedgers" commercials are short the Aussie and long the Swissie on the COT Net Traders Positions any divergence between these group which is + 10 will get our attention and we have this scenario right now...

Speculators have 10.7 to 1 in terms of shorts over longs while commercial hedgers hold 5.3 to 1 in terms of shorts over longs giving us a 16.00 divergence which points to a downturn in AUD/CHF.

Technical Analysis

In terms of our view of the key technical levels of support and resistance too look out for are on the chart below. The risk to expected payout in terms of profit shorting AUD/CHF looks excellent in our view...